1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
sineoko [7]
3 years ago
13

East Corp., a calendar-year company, had sufficient retained earnings in 20X3 as a basis for dividends, but was temporarily shor

t of cash. East declared a dividend of $100,000 on April 1, 20X3 and issued promissory notes to its stockholders in lieu of cash. The notes, which were dated April 1, 20X3, had a maturity date of March 31, 20X4 and an interest rate of 10%.How should East account for the scrip dividend and related interest?
A. Debit retained earnings for $110,000 on April 1, 20X3.
B. Debit retained earnings for $110,000 on March 31, 20X4.
C. Debit retained earnings for $100,000 on April 1, 20X3, and debit interest expense for $10,000 on March 31, 20X4.
D. Debit retained earnings for $100,000 on April 1, 20X3, and debit interest expense for $7,500 on December 31, 20X3.
Business
1 answer:
yarga [219]3 years ago
5 0

Answer:

D. Debit retained earnings for $100,000 on April 1, 20X3, and debit interest expense for $7,500 on December 31, 20X3.

Explanation:

As  East declared a dividend of $100,000 on April 1, 20X3, the journal entry to record the transaction -

Retained earnings debit                         $100,000

Dividend payable  credit                                  $100,000

As east issued promissory notes and the maturity date of March 31, 20X4, an interest rate of 10% arose. Seance the physical year ended in December 2004, the interest rate was accrued for December 2004 (9 months). The journal entry is

Interest expense debit                           $7,500 (Note - 1)

Interest payable  credit                                      $7,500

Calculation: $100,000 × 10% × (9 ÷ 12)

Calculation: $10,000 × (9 ÷ 12) = $7,500

Therefore, option D is correct.

You might be interested in
The ________ is a sequence of activities that determine the earliest date by which a project can be completed.
miskamm [114]
The critical path is a sequence of activities that determine the earliest date by which a project can be completed. 
4 0
3 years ago
Read 2 more answers
​_____ is the industry term for inventory and cash losses from shoplifting damage to​ merchandise, and employee theft.
vichka [17]

Answer:

correct answer is C. Shrinkage

Explanation:

Shrinkage is industry term for an inventory and the cash losses

because shrinkage is difference between the record inventory and actual inventory so that shrinkage is the loss of an inventory and some factor that is attribute like vendor is fraud , employee theft or cashier errors or could be administrative error etc

so here correct option is  C. Shrinkage

7 0
3 years ago
Which of the following is true of variances? a.Unfavorable variances occur whenever actual prices or actual usage of inputs are
Marysya12 [62]

Answer:

B) Favourable Variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage.

Explanation:

Variances refer to the difference between actual and standard or budgeted costs. Standard cost is also referred to as budgeted cost. Budgeted costinh can be used by a food nutritionist to determine the food quantity he can cook as well as the ingredient amount which consists of the budgeted costs and the actual cost of preparing the food. Budgeted costchas a major advantage which is its ability to determine the pricing policy even before the product or service is delivered. When favourable or unfavourable variances are mentioned, it refers to the greater of budgeted or actual price or quantity. Favourable goes with a greater actual price or quantity while unfavorable or adverse goes with a greater standard price or quantity.

5 0
2 years ago
Read 2 more answers
Ghana is the largest exporter of cocoa, while Netherland is the largest importer of cocoa. How have the two participating countr
VladimirAG [237]
I believe the correct answer from the choices listed above is the second option. The two <span>participating countries were benefited by global trade in terms of </span><span>economic growth in both the countries. Hope this answers the question. Have a nice day.</span>
3 0
3 years ago
Read 2 more answers
Partners Dennis and Lilly have decided to liquidate their business. The following information is available:
fgiga [73]

Answer:

Partners Dennis and Lilly have decided to liquidate their business. The following information is available:

Cash $100,000 Accounts Payable $100,000

Inventory $200,000 Dennis, Capital $120,000

Lilly, Capital $80,000

$300,000 $300,000

Dennis and Lilly share profits and losses in a 3:2 ratio. During the first month of liquidation, half the inventory is sold for $60,000, and $60,000 of the accounts payable is paid. During the second month, the rest of the inventory is sold for $45,000, and the remaining accounts payable are paid. Cash is distributed at the end of each month, and the liquidation is completed at the end of the second month.

1. Using a safe payments schedule, how much cash will be distributed to Dennis at the end of the first month?

a. $36,000

b. $64,000

c. $60,000

d. $24,000

2. Using a safe payments schedule, how much cash will be distributed to Lilly at the end of the first month?

a. $40,000

b. $24,000

c. $64,000

d. $16,000

4 0
3 years ago
Other questions:
  • July bought a coat for 30% more than the price she wanted to pay. if she paid $250, how much was she looking to pay?
    5·1 answer
  • Mark each statement if it correctly describes facts about China during the Sui dynasty.
    10·1 answer
  • ​michelle's business produces ceramic cups using​ labor, clay, and a kiln. she produces cups using a fixed proportion of labor a
    9·1 answer
  • 4. Describe a nonprice competition strategy that you have seen a company use. Do you think this strategy was effective? Why or w
    12·1 answer
  • How long has donald trump been married to melania?
    5·2 answers
  • The true rate of interest that you pay on a loan is called the
    13·1 answer
  • Alvez reports net income of $347,500 for the year ended December 31. It also reports $115,800 depreciation expense and a $12,550
    5·1 answer
  • a body of the letter is composed of the: a. purpose, audience, context. b. address, salutation, and closing. c. introduction, su
    7·2 answers
  • The following selected transactions were completed during March of the current year: March 1 Billed customers for fees earned, $
    14·1 answer
  • How does the christian worldview describe ethics
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!